Gold slips as dollar firms, while investors await stimulus

Sat Dec 19 2020
Mark Cooper (3143 articles)
Gold slips as dollar firms, while investors await stimulus

Gold prices slipped on Friday after three days of gains as the dollar’s rebound offset support from hopes of a U.S. fiscal stimulus package.

Spot gold was down 0.1% at $1,883.39 per ounce. U.S. gold futures fell 0.1% to $1,889.30 per ounce.
With coronavirus infections roaring back to new record highs across the United States, pressure mounted on lawmakers to deliver more relief aid in time for a crucial Friday deadline.

“Gold has attached itself entirely to the negotiations on the stimulus package. … The market will rally if there’s positive momentum towards reaching a stimulus deal, and if there’s any indication of a delay gold pulls back,” said Jeffrey Sica, founder of Circle Squared Alternative Investments.

“Once stimulus gets approved in its entirety I anticipate gold will rally substantially because it’s a massive stimulus package.”

The precious metal was still up about 2.5% for the week and on track for a third straight weekly gain.

Banking on U.S. Federal Reserve’s pledge to continue pouring cash into financial markets and keep interest rates low until the U.S. economic recovery is secure, gold hit a peak since Nov. 16 on Thursday.

“The primary focus has been the expectations that we’re going to get a stimulus deal,” said Edward Moya, senior market analyst at OANDA.

“The Fed will remain accommodative, and the Congress is finally going to deliver some stimulus, and the current trajectory of the virus is going to warrant even more stimulus once the Biden administration takes over.”

The dollar index rebounded from a more than two-year trough, making bullion more expensive for holders of other currencies.

Silver slipped 0.8% to $25.84 an ounce, platinum was down 1.2% at $1,032.28, while palladium gained 0.3% at $2,347.25.

Tags Dollar, Gold, Silver, US
Mark Cooper

Mark Cooper

Mark Cooper is Political / Stock Market Correspondent. He has been covering Global Stock Markets for more than 6 years.